GLP Sets Up New China Income Fund With $5B Recapitalisation

GLP on Wednesday announced the formation of GLP China Income Partners V through a $5 billion recapitalisation of the portfolio developed within GLP China Logistics Fund I, marking a full exit of the latter vehicle.

The new CIP V income fund received strong interest from existing CLF I investors that opted to roll over their investment, as well as from new investors such as insurance groups and sovereign and pension funds, the Singapore-based industrial specialist said in a release.

GLP identified finance giants AIA and Allianz as investors in CIP V. The recapitalised portfolio of 54 modern logistics assets spans more than 5 million square metres (53.8 million square feet) across 27 markets in China.

“GLP CIP V represents a significant milestone for our business and could not have been possible without the hard work and dedication of our team to create a coveted portfolio in one of the most sought-after real estate asset classes,” said Teresa Zhuge, executive vice chairman of GLP China. “Logistics continues to prove its resiliency and strong growth potential and we look forward to continuing to create value for our investors over the long-term.”

Long-Running Series

CLF I was the first in GLP’s China Logistics Fund develop-to-core series, launching in 2013 with $1.5 billion in capital commitments. The series continued with the $7 billion CLF II in 2015 and the latest edition, CLF III, which last September achieved a first closing of $1.75 billion, representing the lion’s share of the development vehicle’s $2 billion target.

CLF III is expected to achieve assets under management of as much as $5 billion when fully deployed. The fund’s backers include institutional investors across North America, Asia, Europe and the Middle East.

The recapitalised CLF I portfolio features a diversified tenant roster anchored by major third-party logistics and e-commerce customers representing 70 percent of the leased area, according to GLP. More than 80 percent of the portfolio is located in Tier 1 or 1.5 cities with a lease ratio of more than 90 percent as of May.

The portfolio’s assets include the LEED Platinum-certified GLP Park Shanghai Baoshan, which incorporates technologies such as advanced asset management systems, automation and renewable energy solutions like solar panels and LED lighting.

GLP China’s logistics assets and land holdings amount to more than 49 million square metres. Globally the builder has over $120 billion in assets under management in Asia, Europe and the Americas.

Sino-Sheds Still Sizzling

China’s logistics sector has stayed hot this year as the mainland’s COVID-19 outbreak and subsequent restrictions sent other asset classes into deep freeze.

Earlier this week, GLP arch-rival ESR announced plans to sell a portfolio of nine industrial assets in China to a joint venture of the Hong Kong-listed group and Singapore sovereign fund GIC for $730 million. The portfolio is 98 percent occupied and consists of completed assets with a total gross floor area of more than 873,000 square metres across key regions.

Last month, SF REIT agreed to acquire a warehouse complex in central China for RMB 540 million ($81.2 million), as the Hong Kong-listed logistics trust seeks to enlarge its three-asset portfolio and expand its geographical footprint.

Mingtiandi reported in late May that the real estate investment arm of banking titan Morgan Stanley had bought a portfolio of four logistics assets in cities surrounding Shanghai from Singapore-based SC Capital Partners for an undisclosed sum.

Earlier in May, New World Development revealed plans to purchase six mainland logistics properties from a fund managed by Australia’s Goodman for RMB 2.29 billion, while retail-heavy Link REIT agreed to buy a portfolio of three warehouses in the Yangtze River Delta for RMB 947 million as the second-ever logistics acquisition for Asia Pacific’s largest listed trust.